Hedgehog proteins are secreted signaling molecules that regulate the growth and differentiation of cells during animal development. Hedgehogs meet the classical definition of a morphogen by forming gradients of decreasing concentration that emanate from sites of secretion and induce differentiation of distinct cell types at different positions along the gradient. In this manner Hedgehog proteins mediate the formation of complex tissue patterns. Abnormal Hedgehog signaling can result in severe developmental defects and cancer, and clinical trials assessing the efficacy of Hedgehog signaling inhibitors are underway in cancers of the brain, breast, lung, colon, pancreas, and skin. Perhaps owing to its importance for patterning multiple tissues, the activity of the Hedgehog signaling pathway is tightly regulated. Hedgehog proteins appear to interact with multiple protein and glycan partners that modulate its activity, distribution, or both. The 12-pass integral membrane protein Patched is required for normal reception of Hedgehog signals and has been widely identified as the Hedgehog receptor, but evidence for direct binding of Hedgehog to Patched is absent in flies and indirect in vertebrates. Several additional cell-surface proteins have been shown to bind directly to Hedgehog proteins with high affinity including Ihog in flies and Cdo, Boc, and Hedgehog-interacting protein in vertebrates. Others, including the protein cores of glypicans and a vertebrate-specific protein Gas1, associate with Hedgehog proteins with weaker affinity or as part of larger complexes and have been suggested as co- receptors for Hedgehog proteins. We have expressed and purified active fragments of Hedgehog, Ihog, Cdo, Boc, glypican, and Gas1 proteins, determined crystal structures of Hh:Ihog, Hh:Cdo, and Hh:Boc complexes, and demonstrated that these interactions depend on additional co-factors including heparin and Ca2+. We have also recently expressed and purified small amounts (~40 ug) of Patched. To investigate the molecular mechanisms governing Hedgehog signaling and understand the nature of the Hedgehog receptor at the molecular level we propose X-ray crystallographic, biophysical, and biochemical studies of these Hh pathway components and their complexes. These studies will elucidate the molecular mechanisms governing activity of the Hedgehog signaling pathway and thus the molecular strategies employed to generate complex tissue pattern. Such studies are also likely to uncover molecular interactions or processes that may be targeted for therapeutic inhibition of Hedgehog signaling. We will achieve these goals by pursuing the following specific aims: (1) determine the molecular mechanisms by which glypicans modulate vertebrate and invertebrate Hedgehog signaling, (2) determine the molecular mechanisms by which Gas1 modulates vertebrate Hedgehog signaling and the interplay between Gas1 and other modulators of Hedgehog signaling, and (3) determine the nature of vertebrate and invertebrate Hedgehog receptor complexes by reconstituting the minimal Hedgehog binding complex in vitro with purified components.